Nikkei closes at 1-month low

Other regional markets mostly lower on U.S. data

By

OsamuTsukimori

TOKYO (CBS.MW) - Japanese stock indexes fell to a 1-month low Wednesday following losses on Wall Street, after weak U.S. consumer confidence data clouded the outlook for economic growth in one of Japan's key export markets.

Other regional stock indexes were mostly lower.

The Nikkei Average ended down 115.00 points, or 1.1 percent, at 10,784.25, its lowest finish since Nov. 1. The broader Topix shed 11.43 points, or 1 percent, to 1,087.36.

The Nikkei fell as low as 10,721.59 earlier, but it regained some ground as banking issues firmed.

The Conference Board's U.S. consumer confidence index fell to 90.5 points in November from a revised 92.9 in October. Economists had forecast the confidence index to rise to 95.7 in November.

Also weighing on sentiment was news that the Organization for Economic Cooperation and Development, or OECD, lowered its 2005 economic growth forecasts for the U.S, Japan and the eurozone, saying the surge in oil prices has "depressed real incomes as well as confidence in the OECD countries." Japan's GDP forecast for 2005 was cut to 2.1 percent from 2.8 percent. See full story.

The U.S. data came on the heels of disappointing Japanese industrial production Tuesday. Output fell a seasonally adjusted 1.6 percent in October from September, the Ministry of Economy, Trade and Industry said. Analysts polled by the Nihon Keizai Shimbun expected, on average, an increase of 0.2 percent.

"Investor sentiment worsened after the industrial production data," said Tetsuya Ishijima, senior investment strategist at Okasan Securities Co. in Tokyo.

Australia's S&P/ASX 200 index erased early gains to end down 0.8 percent. Australia's gross domestic product grew 0.3 percent in the third quarter from the second quarter, falling short of a rise of 0.5 percent forecast by economists polled by XFN-Asia.

Economic growth slowed from a revised 0.8 percent expansion in the second quarter, the Australian Bureau of Statistics said.

Telstra Corp. (TLS)
TLS, -1.37%
fell 0.4 percent in Sydney. Australia's largest telephone company said Wednesday it immediately would begin a search to find a new chief executive officer to replace Ziggy Switkowski, who agreed to resign by July 1, 2005, following discussions with the board.

In the chip sector, Tokyo Electron (8035)
TOELF, -3.31%
fell 0.4 percent. U.S. Semiconductor Equipment and Materials International said it expects the market for chip manufacturing equipment to grow 59 percent in 2004, but then it could fall 5.1 percent in 2005. See full story.

Japan Airlines Corp. (9205)
JALSF
declined 0.7 percent. Japan's largest carrier said Wednesday it and co-owner Mitsubishi Trading Co. agreed to sell JAL's headquarters building in Shinagawa in central Tokyo next March for 65 billion yen ($633 million) to Nomura Real Estate. JAL will use the proceeds to help achieve its midterm goal of reducing interest-bearing debt by 400 billion yen by March 2007.

Softbank Corp. (9984)
SFTBF, +1.23%
lost 3.9 percent. The Internet investor on Tuesday said it agreed to buy Japan's professional baseball team Fukuoka Daiei Hawks from struggling retailer Daiei Inc. (8263)
DAIEF
for 5 billion yen. It also announced it will buy rights to market games and events at Fukuoka Dome from a subsidiary of U.S. investment fund Colony Capital for 15 billion yen.

Shares of all four major banking groups were higher, led by UFJ Holdings (8307)
UFJHF
up 2 percent. The government lifted regulations against stock sales at Japanese bank outlets from today.

Investors shrugged off reports that UFJ Bank's former vice president was arrested Wednesday on suspicion of obstructing the financial watchdog's inspections by destroying evidence.

The dollar traded at 102.75 yen in late Tokyo, compared with 102.89 yen late Tuesday in the United States.

January crude oil futures fell 63 cents to close at a one-week low of $49.13 a barrel on the New York Mercantile Exchange, as uncertainty ahead of this week's updates on U.S. petroleum supplies outweighed some expectations that OPEC will decide to cut output next month. See Futures Movers. The contract fell to $48.95 in after-hours trade.

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